April 9 (Bloomberg) -- A doctor who treats a degenerative eye disease in seniors was paid $21 million by Medicare in 2012, twice the amount received by the next ophthalmologist on a list of 880,000 medical providers released by the government.
The data on the payments was given to the public for the first time today by the Centers for Medicare and Medicaid Services. The list, a detailed account of how $77 billion in federal health-care funds were spent in 2012, showed a wide range in which some top earners were paid as much as 100 times the average for their respective fields.
Consumer groups have long urged the release of data showing Medicare’s true cost to taxpayers, saying it could help highlight fraud, while doctors’ groups argued against the release of raw payment data, saying it may lead patients to jump to the wrong conclusions.
“When I was prosecuting Medicare fraud cases years ago, it was often difficult even for us as prosecutors to get Medicare data in a timely fashion,” said Jay Darden, a partner at Patton Boggs LLP in Washington who left the Department of Justice in 2010. “So the notion that now it’s not only being released, but released to the public, that could very well signal a recognition from CMS that it’s had a problem in the past and it needs to do something about it.”
Two doctors listed, who together were paid about $30 million, spent time in court in 2013 on claims they defrauded the government. While Medicare fraud cases aren’t unusual, the data released will provide a new level of transparency into the agency practices that may force doctors to become more careful in how they bill for Medicare patients.
64 Times Average
Salomon Melgen, a Florida ophthalmologist who has been linked to a criminal probe involving U.S. Senator Robert Menendez, was paid $20,827,341 in 2012, or 64 times the average in his field, the data show. His appeal of a 2009 ruling that found he overbilled Medicare by $8.9 million was rejected last year. Farid Fata, a Michigan oncologist was paid $10,063,281 in 2012, was charged with Medicare fraud in August, according to court records. The data opens fresh questions about Medicare’s payment policies.
“Deterring improper payments is a top priority of CMS in order to protect beneficiaries and taxpayers,” said Aaron Albright, a CMS spokesman. The agency “is working with our contractors to develop an appropriate cumulative payment threshold that considers costs, as well as potential benefits in determining which claims and providers should be selected for further scrutiny.”
Kirk Ogrosky, a former federal prosecutor who now represents Melgen’s company, said U.S. officials who combat fraud shouldn’t be looking at raw payment amounts alone.
‘Billed in Conformity’
“At all times, Dr. Melgen billed in conformity with Medicare rules,” Ogrosky said, referring to his client’s legal situation before the release of the 2012 data, which was given to media organizations with the agreement it wouldn’t be disclosed before this morning.
Fata, in jail since his arrest in August, has pleaded not guilty to the charges against him, according to court records. His attorney, Christopher Andreoff of Southfield, Michigan, said he hasn’t seen the CMS report and declined to comment. CMS, meanwhile, won’t comment on any data involving individual doctors, according to spokesman Albright.
The American Medical Association yesterday warned that the release of raw payment data without proper perspective on it may lead patients to the wrong conclusions.
“The AMA is concerned that CMS’s broad approach to releasing physician payment data will mislead the public into making inappropriate and potentially harmful treatment decisions, and will result in unwarranted bias against physicians that can destroy careers,” Ardis Dee Hoven, president of the Chicago-based group, said in an e-mail.
Some of the numbers may be inaccurate and doctors haven’t been given a chance to review the data and make corrections, Hoven said in a telephone interview.
Providers in a large practice group could bill all their services under one name, Albright said.
The listings, when seen in aggregate, offer insight into doctors’ billing practices across a variety of specialties.
Melgen and Fata were among seven individual providers who received more than $10 million from Medicare in 2012, the data show, and the top 25 doctors totaled $231.7 million from the program. Among the top 25 physicians, 12 were ophthalmologists, six were oncologists and eight lived in Florida, the only state to appear more than three times in the top-ranking list.
Twice as Much
Melgen, based in West Palm Beach, was the highest-paid doctor, according to the listings, with reimbursements that were twice as much as the next highest paid ophthalmologist, Alexander Eaton of Fort Myers, Florida. Eaton, paid $10,726,482, was the fifth-highest paid.
While Melgen made twice that of Eaton, half as many patients were served through his offices, according to the CMS listings. He saw 894 people compared with Eaton’s 2,721.
Melgen, 59, has been in the spotlight since 2009 when U.S. officials ruled he overbilled Medicare the previous two years for injections of a drug for age-related macular degeneration.
Melgen lost an appeal before the Medicare Appeals Council in June 2013, and sued in August in federal court in Miami seeking to overturn the decision. Last month, attorneys for his company, Vitreo Retinal Consultants of the Palm Beaches PA, urged a judge to reverse the decision, arguing the ruling wasn’t backed by substantial evidence and that the doctor’s billing practices were appropriate, according to court papers filed March 27.
Melgen also has been at the center of a criminal probe into whether Menendez, the chairman of the Foreign Relations Committee, improperly helped the doctor in a Medicare-billing dispute. The doctor, who has described his relationship with the senator as “like brothers,” said in interviews with Bloomberg News in April 2013 that his companies never benefited from the 20-year friendship and that he broke no laws.
A grand jury last year examined whether Menendez intervened in Melgen’s billing dispute with the U.S. Department of Health and Human Services. The criminal probe became public in late January 2013 when agents from the HHS and the Federal Bureau of Investigation raided Melgen’s offices over two days in West Palm Beach, Port St. Lucie and Delray Beach.
Tricia Enright, a spokeswoman for Menendez, declined to comment on the Justice Department’s investigation.
HHS notified Vitro of a suspension in Medicare payments in letters dated Aug. 20 and Aug. 23, 2013, lawyers for the company said in court papers filed Oct. 18. HHS agreed Oct. 29 to lift the suspension after Melgen said the company was no longer billing Medicare for multidosing Lucentis, the injection for macular degeneration, according to a joint court filing.
Fata, who owns and operates at least six oncology centers under the name Michigan Hematology Oncology PC, was arrested in August on charges he submitted false claims to Medicare for medically unnecessary services. Fata billed patients in remission for chemotherapy, deliberately misdiagnosed patients as having cancer to justify chemotherapy and fabricated diagnosis as reasons for ordering hematology treatments, prosecutors said in court papers.
Fata also allegedly delayed emergency treatment for some patients with serious medical conditions until he could administer and bill for chemotherapy. In one instance, a patient with potentially fatal low sodium levels was given chemotherapy before being taken to an emergency room and hospitalized, prosecutors said.
The data released today showed that Fata received $10 million in Medicare payments in 2012, making him the highest paid oncologist out of 7,374 providers in his field.
Fata has been jailed since his arrest after prosecutors successfully argued the doctor, a Lebanon native who became a naturalized U.S. citizen in 2009, is inclined to flee and has the means to do so. Fata and his wife have a taxable estate worth more than $40 million and more than $14 million in mostly liquid assets, prosecutors said last year. The oncologist’s trial is set for August.
Other doctors that were highest paid included Asad Qamar, a cardiologist based in Ocala, Florida, who was paid $18,154,816 by Medicare in 2012. The next-highest cardiologist was paid $4,499,469.
Qamar serves “a heavily concentrated Medicare population by providing a variety of state-of-the-art cardiovascular interventional procedures and services to patients with advanced peripheral vascular arterial disease,” Tracy Mabry, Qamar’s lawyer, said in an e-mail. He added that all of Qamar’s Medicare claims “are subject to thorough pre-payment review of supporting medical documentation.”
The third- and fourth-highest paid doctors, Michael McGinnis and Franklin Cockerill, both pathologists, were paid $12,577,017 and $11,068,463 respectively in 2012.
Cockerill, who is based in Rochester, Minnesota, billed for 56,628 unique patients in the year, providing more than a million services. McGinnis, based in Wrightstown, New Jersey, saw 33,154 patients. The two doctors received more than twice the amount of the third-highest paid pathologist, who received about $5 million in 2012 for 8,976 patients.
McGinnis said his provider code was used for about 27 doctors at Plus Diagnostics in Union, New Jersey, where he is the medical director.
“I don’t really work directly at the facility, I’m doing administrative work,” McGinnis said in a telephone interview today. Referring to today’s data release, he added, “I’m not offended by it, but it’ll need to be interpreted correctly so the wrong ideas and wrong statements won’t be made.”
Cockerill, who is the chairman of the Mayo Clinic Department of Laboratory Medicine and Pathology and a lab director, is in a similar situation, Mayo Clinic spokesman Bryan Anderson said in an e-mail. “His name is listed as the billing physician for claims submitted for payment under the clinical lab fee schedule,” Anderson said.
Cockerill’s lab performed more than 23 million lab tests in 2013, said Anderson, and he is a salaried physician.
The Melgen case is Vitreo Retinal Consultants of the Palm Beaches PA v. Kathleen Sebelius, 13-22782, U.S. District Court, Southern District of Florida (Miami); the Fata case is U.S. v. Farid Fata, 13-cr-20600, U.S. District, Court Eastern District of Michigan (Detroit).
To contact the reporters on this story: Caroline Chen in New York at firstname.lastname@example.org; Sophia Pearson in federal court in Philadelphia at